Looking to remortgage your home? You have done the hard part in obtaining a mortgage in the first place so don't get confused now. Use our remortgage guide to help you through the process.
Remortgaging is when you replace your current home loan with a new mortgage. You might decide to do this when the product of your existing mortgage comes to an end, usually because a new mortgage product can save you money through lower repayments.
Remortgaging is not the same as switching a product, which is when you remain with your present lender but choose a different mortgage product. In contrast, remortgaging is when you actually change your mortgage to another lender. However, before doing so, it might be a good idea to approach your current lender to see if they’re able to find you a better mortgage rate as this can save you the extra expense of fees and charges that normally comes with remortgaging.
You may believe you’re saving money with a lower interest rate but, in reality, you might be worse off if you haven’t taken into account the mortgage fees and other charges. It’s therefore essential to calculate all the costs so that you know which is the better deal.
Early repayment charge (ERC)
This is a fee you incur if you repay your mortgage during a tie-in period, which tends to be the length of the initial deal - for instance, a fixed rate two year term. It can also happen if you overpay more than is allowed in the deal. It could prove costly as a typical early repayment charge comes from a percentage of your current mortgage balance.
Sometimes referred to as a ‘deed release fee’ or admin charge, this is a charge for releasing your property deeds to your solicitors.
Often the most expensive part of remortgaging, mortgage fees could be the deciding factor in your decision to change lender or not. They can range from a completion fee to a booking fee and product fees, and are paid to your new lender. In making your decision, you need to consider the possible fees carefully as they can make all the difference.
Sometimes we have offers where these fees are waived. Alternatively, you may be able to add your completion fee to your mortgage, but this can affect the amount you owe, your interest and your monthly mortgage payments.
This is required by all lenders as they want to be sure the money they’re lending you will cover the cost of the property if, for whatever reason, you weren’t able to keep up your repayments. Again from time to time we have offers where this fee is not charged.
There is much less legal work involved in a remortgage so the fees are generally less than if you were moving home, usually around £300. These relate to removing the original lender’s interest from the property and registering the new lender. We may at times offer a ‘fees assisted legals package’, where we’ll instruct a solicitor or licensed conveyancer on your behalf and pay for the basic legal costs.
Check out all the costs that can occur with our fees and costs explained guide.
Here at the West Brom, you’ll find a range of mortgages designed specifically to meet your financial circumstances including competitive fixed and discounted variable rate mortgages. We can also help you choose the one that feels best for you.
Fixed rate mortgages - If you want the peace of mind that comes from knowing what your mortgage payments will be every month, then a fixed rate mortgage could be for you. This type of mortgage fixes your interest rate for an agreed period of time and means your rate won’t be affected by changes in the Bank of England Base Rate (Bank Rate), whether it goes up or down.
Tracker mortgages - A tracker mortgage follows and tracks movements of another rate. This is usually the Bank Rate. As a result, you could benefit from cheaper mortgage payments when the Bank Rate is low; but you’ll also need to budget for higher mortgage payments should the Bank Rate go up.
Variable rate mortgages - There are several types of variable rate mortgages such as standard variable and discount. Like tracker mortgages they don’t protect you from future rate increases but they could allow you to benefit from cheaper payments when interest rates are low. Standard variable rates are usually set by individual lenders so they might change without the Bank Rate moving. This includes the West Brom but, if we do change our Standard Variable Rate (SVR), we’ll make sure we tell you by writing to you with plenty of notice to let you know if your mortgage payments will be going up or down.
From time to time, the West Brom may launch or withdraw certain types of mortgages or change its range of available mortgages.
If you’re looking to product switch or remortgage there are usually two options:
Ask your current lender for a closing balance to confirm your outstanding balance and any fees that might apply on your mortgage.
Speak to us to discuss your personal financial requirements and find out how much you can borrow and the best mortgage deal for you.
We'll give you an Agreement in Principle (AIP) to help you with your remortgage.
When you've decided to proceed you'll need an appointment with a mortgage adviser to go through the mortgage application.
We'll sort the valuation of your property and if applicable help you get a solicitor to transfer your mortgage from your existing lender. Or, if you prefer, you can get your own solicitor to do this bit.
We're now ready to give you a mortgage offer.
Congratulations - you've now completed on your mortgage.
To ensure the remortgaging process runs smoothly, you’ll need essential information and documents when getting in touch with us. It probably also helps to have a good idea of your current financial details such as the term left on the mortgage, monthly repayments and that kind of thing. The main items required are: